Call for uniform documentation
The variation between lenders means that while some ask for a single payslip to support a mortgage application, others require multiple payslips, bank statements and P60s.
This system has been attacked as being overly complicated and Stephen McDaniel, a broker at The MORE Group called for a standardised system across the industry.
He said: “When it comes to supporting documentation, there often seems to be a wide variation from lender to lender. There should be a common method of submitting documentation as you can expect lenders to make checks but they should be blanket checks so there is a common standard within the mortgage industry.”
The advent of regulation has placed greater emphasis on supporting documentation for the application, with the FSA particularly keen to see evidence to back up the actions of the broker. For McDaniel, it seemed absurd that lenders operate with different criteria.
He added: “I am sure the lenders will say that it is their individual decision, but it doesn’t really address the question. This documentation variation can’t be justified under ‘Treating Customers Fairly’ and the recent money laundering rules. It seems lenders have policies but they haven’t looked at them recently.”
Duncan Pownall, mortgage development manager at Bradford & Bingley, insisted a uniform system wouldn’t work.
“It is down to a lender’s own risk exposure and it is realistic to ask for different documentation. If you want to have better rates then you need to expect to provide more paperwork. For example, self-certification doesn’t need much paperwork but the interest rates are slightly higher.
“Also, not all banks have the same credit rating and credit risk so standardised documentation just wouldn’t work.”